2013-3-1 1
Chapter 4,
Project Scope
Management
2013-3-1 2
Learning Objectives
? Understand the importance of good project scope
management
? List the reasons why most firms invest in IT projects
? Describe the strategic planning process and how it relates to
IT project selection
? Apply different project selection methods
? Explain the purpose of a project charter,scope statement,
and work breakdown structure(WBS)
? Construct a WBS
? Describe tools and techniques to assist in scope verification
and change control on information technology projects
2013-3-1 3
Chapter Outline
? What is Project Scope Management?
? Project Initiation,Strategic Planning and
Project Selection
? Identifying Potential Projects
? Methods for Selecting Projects
? Focusing on Broad Organizational Needs
? Categorizing Information Technology Projects
? Net Present Value Analysis,ROI,and Payback Analysis
? Weighted Scoring Model
? Project Charters
? Scope Planning and the Scope Statement
? The Scope Statement
2013-3-1 4
Chapter Outline
? Scope Definition and the Work Breakdown
Structure
? The Work Breakdown Structure
? Approaches to Developing Work Breakdown Structures
? Using Guidelines
? The Analogy Approach
? The Top-Down and Bottom-Up Approaches
? Scope Verification and Scope Change Control
? Suggestions for Improving User Input
? Suggestions for Reducing Incomplete and Changing
Requirements
2013-3-1 5
4.1 What is Project Scope
Management?
2013-3-1 6
Importance of Good Project
Scope Management
? 1995 CHAOS study cited
? user involvement,
? a clear project mission,
? a clear statement of requirements,
? proper planning
as being important for project success
? Poor project definition and Scope Verification
are the main reasons projects fail*
*The program manager of Keller Graduate School of Management cites
2013-3-1 7
Project Scope Management
? Project Scope refers to all the work involved in
creating the products of the project and the
processes used to create them
? Project scope management includes the
processes involved in defining and controlling
what is or is not included in the project
? The project team and stakeholders must have the
same understanding of what products will be
produces as a result of a project and what
processes will be used in producing them
2013-3-1 8
Important Concepts and Tools
? Financial justification for projects
? Project charters
? Work breakdown structure
? Deliverables
? Scope statement
? Scope verification
2013-3-1 9
Project Scope Management Processes
? Initiation,beginning a project or continuing
to the next phase
? Scope planning,developing documents to
provide the basis for future project decisions
? Scope definition,subdividing the major
project deliverables into smaller,more
manageable components
? Scope verification,formalizing acceptance of
the project scope
? Scope change control,controlling changes to
project scope
2013-3-1 10
4.2 Project Initiation,Strategic
Planning and Project Selection
2013-3-1 11
Strategic Planning and Project
Selection
? The first step in initiating projects is to
look at the big picture or strategic plan
of an organization
? Strategic planning involves determining
long-term business objectives
? IT projects should support strategic and
financial business objectives
2013-3-1 12
Why Firms Invest in IT
Reason f or In vestin g i n IT P roj ec ts Ran k B ased on O ver al l Val u e of P roj ec ts
S upp orts ex pl i cit bus i ness ob j ec t i ves 1
Has g ood I nt er nal R ate of Ret urn (I R R ) 2
S upp orts i m pl i cit bus i ness ob j ec t i ves 3
Has g ood Net P re sent Value (NP V) 4
Has re asonable pay b ac k period 5
Used i n re spo nse t o com peti t i ve sy st ems 6
S upp orts m ana g ement dec i si on m aking 7
M ee t s bu dg etar y const ra i nt s 8
Hi g h probabi l i t y of ac hi eving benef i t s 9
Good ac count i ng ra t e of re t urn 10
Hi g h probabi l i t y of comp l eti ng proj ec t 11
M ee t s t ec hni ca l / sy st em requirement s 12
S upp orts l eg al/ g overnment re qui re m ent 13
Good profit abil i t y i ndex 14
I nt roduce s new t ec hno l og y 15
2013-3-1 13
4.2.1 Identifying Potential Projects
? Many organizations follow a planning
process for selecting IT projects
?First develop an IT strategic plan based on the
organization’s overall strategic plan
?Then perform a business area analysis
?Then define potential projects
?Then select IT projects and assign resources
2013-3-1 14
IT Planning Process
2013-3-1 15
4.2.2 Methods for Selecting Projects
? There are usually more projects than
available time and resources to implement
them
? It is important to follow a logical process
for selecting projects to work on
? Methods include
? focusing on broad needs
? categorizing projects
? financial methods,
? weighted scoring models
2013-3-1 16
1,Focusing on Broad Organizational
Needs
? It is often difficult to provide strong
justification for many IT projects,but
everyone agrees they have a high value
? Three important criteria for projects,
? There is a need for the project
? There are funds available
? There’s a strong will to make the project
succeed
2013-3-1 17
2.Categorizing IT Projects
? One categorization is whether the
project addresses
? a problem
? an opportunity
? a directive
? Another categorization is how long it
will take to do and when it is needed
? Another is the overall priority of the
project
2013-3-1 18
3,Financial Analysis of Projects
? Financial considerations are often an
important consideration in selecting
projects
? Three primary methods for determining
the projected financial value of projects,
? Net present value (NPV) analysis
? Return on investment (ROI)
? Payback analysis
2013-3-1 19
Explain Financial Terms in Your Own
Words
? NPV(Net Present Value)
? ROI(return on investment )
? Payback analysis
2013-3-1 20
Net Present Value Analysis
? Net present value (NPV) analysis is a method
of calculating the expected net monetary gain
or loss from a project by discounting all
expected future cash inflows and outflows to
the present point in time
? NPV is one dollar amount
? Projects with a positive NPV should be
considered if financial value is a key criterion
? The higher the NPV,the better
2013-3-1 21
Net Present Value Example
2013-3-1 22
Return on Investment
? Return on investment (ROI) is income divided
by investment
ROI = (total discounted benefits - total discounted costs)
/ discounted costs
? ROI is a percentage,like 10%,20%,etc,
? The higher the ROI,the better
? Many organizations have a required rate of
return or minimum acceptable rate of return
on investment for projects
2013-3-1 23
Payback Analysis
? The payback period is the amount of
time it will take to recoup,in the form
of net cash inflows,the net dollars
invested in a project
? Payback occurs when the cumulative
discounted benefits are greater than
the cumulative discounted costs
? Many organizations want IT projects to
have a fairly short payback period
2013-3-1 24
NPV,ROI,and Payback Analysis for
Project 1
2013-3-1 25
NPV,ROI,and Payback Analysis for
Project 2
2013-3-1 26
Class Exercise – Pair up
? Use Excel if available
? If you don’t have a computer handy,lay out
the spreadsheet on paper and use a
calculator or estimate the numbers
? Note that this exercise uses the same
discount rate,so you can use the discount
factors,It’s better to enter the discount
formula if using a spreadsheet and discount
rates will change
2013-3-1 27
4.Weighted Scoring Model
? A weighted scoring model is a tool that
provides a systematic process for selecting
projects based on many criteria
? First identify criteria important to the project
selection process
? Then assign weights (percentages) to each criterion
so they add up to 100%
? Then assign scores to each criterion for each
project
? Multiply the scores by the weights and get the total
weighted scores
? The higher the weighted score,the better
2013-3-1 28
Sample Weighted Scoring Model for
Project Selection
2013-3-1 29
Class Activity – Large Group
? Create a weighted scoring model for
selecting a mate
? Determine 4-5 important criteria,then
determine their weights
? Pick a few candidate mates and apply
scoring model
? Calculate weighted scores (I’ll put in
Excel)
2013-3-1 30
4.2.3 Project Charters
? After deciding what project to work on,
it is important to formalize projects
? A project charter is a document that
formally recognizes the existence of a
project and provides direction on the
project’s objectives and management
? Key project stakeholders should sign a
project charter to acknowledge
agreement on the need and intent of the
project
2013-3-1 31
Sample Project Charter
P roje ct T itle, Inf orm ation T ec hn olo gy ( IT ) Upg ra de P rojec t
P roje ct S tart D ate,M ar ch 4,20 02 P roje ct ed F inish Date, De ce m ber 4,20 2
P roje ct Manag er, Kim N gu y en,69 1 - 27 84,kn gu y en@ abc,com
P roje ct O bj ec tives,Upg ra d e hardwar e and sof twa re fo r all em plo y ee s
(a pp roxim ate ly 2,00 0) within 9 m on ths based on new corporate sta nd ar ds, Se e
atta ched sheet describing the new stand ar ds, U pg ra des m ay a f f ec t se rver s a nd
m idrange c om pu ter s a s w ell as network har dwar e and sof twa re, Bud geted $1,000,000
f or hardwar e and sof twa re c os ts a nd $50 0,00 0 f or labo r costs,
Ap pr oa ch,
? ? Upd ate the IT invento ry data base to dete rm ine upg ra de needs
? ? De velo p detailed cost estim ate fo r project and r epo rt to CI O
? ? Issue a r equ est f or qu otes to ob tain har d wa re a nd sof twa re
? ? Use internal staf f a s m uch a s po ssib le to do the plan nin g,analy sis,and installation
2013-3-1 32
Sample Project Charter (continued)
N am e R ole R e sponsibil ity
Wa lt e r Sc hm idt,CE O Pr oje c t Spon so r M on it or p r oje c t
M ike Z w a c k CI O M on it or p r oje c t,pr ov ide
sta f f
K im N g uy e n Pr oje c t Ma na g e r Plan a nd e x e c ute p r oje c t
J e f f J oh ns on D ire c tor o f I T O pe r a ti on s M e ntor K im
N a nc y Re y no lds V P,H um a n R e so ur c e s Pr ov ide sta f f,issu e m e mo
to a ll e mp loy e e s a bo ut
pr oje c t
Stev e M c Ca nn D ire c tor o f Pur c ha sing A ssist in pu r c ha sing
ha r dw a r e a nd so f tw a r e
Sign - of f, ( Sig na tur e s o f a ll a bo ve sta ke ho lde r s)
Roles and Responsibilities,
2013-3-1 33
4.3 Scope Planning and
the Scope Statement
2013-3-1 34
Scope Planning
? After a project charter is done,many
projects require additional
documentation to determine the
scope—scope planning,
? Main output of scope planning is Scope
Statement
2013-3-1 35
Scope Statement
? A scope statement is a document used
to develop and confirm a common
understanding of the project scope,It
should include
? a project justification
? a brief description of the project’s products
? a summary of all project deliverables
? a statement of what determines project
success
2013-3-1 36
4.4 Scope Definition and the
Work Breakdown Structure
2013-3-1 37
Scope definition
? After completing scope planning,the next
step is to further define the work by
breaking it into manageable pieces
? Good scope definition
? helps improve the accuracy of time,cost,and
resource estimates
? defines a baseline for performance
measurement and project control
? aids in communicating clear work
responsibilities
2013-3-1 38
4.4.1 The WBS
? A work breakdown structure (WBS) is an
outcome-oriented analysis of the work
involved in a project that defines the total
scope of the project
? It is a foundation document in project
management because it provides the basis
for planning and managing project schedules,
costs,and changes
? You need a WBS to create a Gantt chart,do
critical path analysis,and to use earned value
analysis
2013-3-1 39
Sample Intranet WBS Organized
by Product
2013-3-1 40
Sample Intranet WBS Organized by
Phase
2013-3-1 41
Intranet WBS in Tabular Form
1.0 Concept
1.1 Evaluate current systems
1.2 Define Requirements
1.2.1 Define user requirements
1.2.2 Define content requirements
1.2.3 Define system requirements
1.2.4 Define server owner requirements
1.3 Define specific functionality
1.4 Define risks and risk management approach
1.5 Develop project plan
1.6 Brief web development team
2.0 Web Site Design
3.0 Web Site Development
4.0 Roll Out
5.0 Support
2013-3-1 42
Intranet WBS and Gantt Chart in
Microsoft Project
WBS Gantt Chart
2013-3-1 43
Intranet WBS and Gantt Chart
Organized by PM Process Groups
2013-3-1 44
4.4.2 Approaches to Developing
WBSs
? Using guidelines,Some organizations,like
the DOD,provide guidelines for preparing
WBSs
? The analogy approach,It often helps to
review WBSs of similar projects
? The top-down approach,Start with the
largest items of the project and keep
breaking them down
? The bottoms-up approach,Start with the
detailed tasks and roll them up
2013-3-1 45
Basic Principles for Creating WBSs*
1,A unit of work should appear at only one place in the WBS,
2,The work content of a WBS item is the sum of the WBS items
below it,
3,A WBS item is the responsibility of only one individual,even
though many people may be working on it,
4,The WBS must be consistent with the way in which work is
actually going to be performed; it should serve the project
team first and other purposes only if practical,
5,Project team members should be involved in developing the
WBS to ensure consistency and buy-in,
6,Each WBS item must be documented to ensure accurate
understanding of the scope of work included and not
included in that item,
7,The WBS must be a flexible tool to accommodate inevitable
changes while properly maintaining control of the work
content in the project according to the scope statement,
*Cleland,David I,Project Management,Strategic Design and Implementation,1994
2013-3-1 46
Class Exercise
? Create a WBS for building a dream
house(or Event Planning WBS )
? Get into groups of 6-7 and have one
person describe his/her dream home
? Group decide how to organize the work
involved in making the home a reality
? List several deliverables for each level
1 WBS item
? Take one WBS item down to level 3
2013-3-1 47
More WBS Suggestions
? Many projects can use the approach
shown by process group
? The executing section is where projects
vary the most
? To make the WBS easier to map to a
schedule,you can focus on deliverables
2013-3-1 48
Sample Deliverables and Dates
? Initiating,Project charter,2/1
? Planning,Project plan,4/1
? Executing,
? Concept deliverable 1,5/1
? Design del,1,5/1,del,2,6/1
? Development del,1,7/1,del,2,9/1
? Roll Out del,1,10/1
? Support del,1,11/1
? Controlling,Monthly project reviews
? Closing,Project archives,12/1
2013-3-1 49
4.5 Scope Verification and
Scope Change Control
2013-3-1 50
Scope Verification and Scope Change
Control
? It is very difficult to create a good
scope statement and WBS for a project
? It is even more difficult to verify project
scope and minimize scope changes
? Many IT projects suffer from scope
creep and poor scope verification
? FoxMeyer Drug filed for bankruptcy after
scope creep on a robotic warehouse
2013-3-1 51
Factors Causing IT Project Problems*
F a c tor Ra n k
L a c k o f u se r in p u t 1
I n c o mp le te r e q u ir e me n ts a n d sp e c if ic a tion s 2
Ch a n g ing r e q u ir e me n ts a n d sp e c if ic a tion s 3
L a c k o f e x e c u tive su p p o r t 4
T e c h n o log y in c o mp e te n c e 5
L a c k o f r e so u r c e s 6
U n r e a listic e x p e c ta tion s 7
U n c le a r o b je c tive s 8
U n r e a listic time f r a me s 9
N e w T e c h n o log y 10
*Johnson,Jim,"CHAOS,The Dollar Drain of IT Project Failures," Application Development Trends,
January 1995,www.stadishgroup.com/chaos.html
2013-3-1 52
4.5.1 Suggestions for Improving
User Input
? Insist that all projects have a sponsor
from the user organization
? Have users on the project team
? Have regular meetings
? Deliver something to project users and
sponsor on a regular basis
? Co-locate users with the developers
2013-3-1 53
4.5.2 Suggestions for Reducing Incomplete
and Changing Requirements
? Develop and follow a requirements management
process
? Employ techniques such as prototyping,use case
modeling,and Joint Application Design to thoroughly
understand user requirements
? Put all requirements in writing and current
? Create a requirements management database
? Provide adequate testing
? Use a process for reviewing requested changes from
a systems perspective
? Emphasize completion dates
2013-3-1 54
Quick Quiz
? What is the main reason why firms invest in information technology
projects?
? If you have three independent projects with NPVs of $100,$400,and -
$100,which project(s) would you recommend based solely on the NPV?
? What document formally recognizes the existence of a project?
? What is the main output of the scope definition process and is also an
outcome-oriented analysis of the work involved in a project that defines
the total scope of the project?
ANSWER,to support explicit business objectives
ANSWER,Recommend the project with an NPV of $100 and the one
with an NPV of $400,Both are profitable,If you must choose one
project,recommend the project with the highest NPV? $400 in this
example,
ANSWER,a project charter ANSWER,a WBS
2013-3-1 55
Assignment for chapter 4
? For Web site project(or you are
familiar with)
? Do the identification and selection of the
Project
? Create the project charter
? Do the stakeholder analysis
? Create a WBS,Take the WBS item down
to level 3-6
Chapter 4,
Project Scope
Management
2013-3-1 2
Learning Objectives
? Understand the importance of good project scope
management
? List the reasons why most firms invest in IT projects
? Describe the strategic planning process and how it relates to
IT project selection
? Apply different project selection methods
? Explain the purpose of a project charter,scope statement,
and work breakdown structure(WBS)
? Construct a WBS
? Describe tools and techniques to assist in scope verification
and change control on information technology projects
2013-3-1 3
Chapter Outline
? What is Project Scope Management?
? Project Initiation,Strategic Planning and
Project Selection
? Identifying Potential Projects
? Methods for Selecting Projects
? Focusing on Broad Organizational Needs
? Categorizing Information Technology Projects
? Net Present Value Analysis,ROI,and Payback Analysis
? Weighted Scoring Model
? Project Charters
? Scope Planning and the Scope Statement
? The Scope Statement
2013-3-1 4
Chapter Outline
? Scope Definition and the Work Breakdown
Structure
? The Work Breakdown Structure
? Approaches to Developing Work Breakdown Structures
? Using Guidelines
? The Analogy Approach
? The Top-Down and Bottom-Up Approaches
? Scope Verification and Scope Change Control
? Suggestions for Improving User Input
? Suggestions for Reducing Incomplete and Changing
Requirements
2013-3-1 5
4.1 What is Project Scope
Management?
2013-3-1 6
Importance of Good Project
Scope Management
? 1995 CHAOS study cited
? user involvement,
? a clear project mission,
? a clear statement of requirements,
? proper planning
as being important for project success
? Poor project definition and Scope Verification
are the main reasons projects fail*
*The program manager of Keller Graduate School of Management cites
2013-3-1 7
Project Scope Management
? Project Scope refers to all the work involved in
creating the products of the project and the
processes used to create them
? Project scope management includes the
processes involved in defining and controlling
what is or is not included in the project
? The project team and stakeholders must have the
same understanding of what products will be
produces as a result of a project and what
processes will be used in producing them
2013-3-1 8
Important Concepts and Tools
? Financial justification for projects
? Project charters
? Work breakdown structure
? Deliverables
? Scope statement
? Scope verification
2013-3-1 9
Project Scope Management Processes
? Initiation,beginning a project or continuing
to the next phase
? Scope planning,developing documents to
provide the basis for future project decisions
? Scope definition,subdividing the major
project deliverables into smaller,more
manageable components
? Scope verification,formalizing acceptance of
the project scope
? Scope change control,controlling changes to
project scope
2013-3-1 10
4.2 Project Initiation,Strategic
Planning and Project Selection
2013-3-1 11
Strategic Planning and Project
Selection
? The first step in initiating projects is to
look at the big picture or strategic plan
of an organization
? Strategic planning involves determining
long-term business objectives
? IT projects should support strategic and
financial business objectives
2013-3-1 12
Why Firms Invest in IT
Reason f or In vestin g i n IT P roj ec ts Ran k B ased on O ver al l Val u e of P roj ec ts
S upp orts ex pl i cit bus i ness ob j ec t i ves 1
Has g ood I nt er nal R ate of Ret urn (I R R ) 2
S upp orts i m pl i cit bus i ness ob j ec t i ves 3
Has g ood Net P re sent Value (NP V) 4
Has re asonable pay b ac k period 5
Used i n re spo nse t o com peti t i ve sy st ems 6
S upp orts m ana g ement dec i si on m aking 7
M ee t s bu dg etar y const ra i nt s 8
Hi g h probabi l i t y of ac hi eving benef i t s 9
Good ac count i ng ra t e of re t urn 10
Hi g h probabi l i t y of comp l eti ng proj ec t 11
M ee t s t ec hni ca l / sy st em requirement s 12
S upp orts l eg al/ g overnment re qui re m ent 13
Good profit abil i t y i ndex 14
I nt roduce s new t ec hno l og y 15
2013-3-1 13
4.2.1 Identifying Potential Projects
? Many organizations follow a planning
process for selecting IT projects
?First develop an IT strategic plan based on the
organization’s overall strategic plan
?Then perform a business area analysis
?Then define potential projects
?Then select IT projects and assign resources
2013-3-1 14
IT Planning Process
2013-3-1 15
4.2.2 Methods for Selecting Projects
? There are usually more projects than
available time and resources to implement
them
? It is important to follow a logical process
for selecting projects to work on
? Methods include
? focusing on broad needs
? categorizing projects
? financial methods,
? weighted scoring models
2013-3-1 16
1,Focusing on Broad Organizational
Needs
? It is often difficult to provide strong
justification for many IT projects,but
everyone agrees they have a high value
? Three important criteria for projects,
? There is a need for the project
? There are funds available
? There’s a strong will to make the project
succeed
2013-3-1 17
2.Categorizing IT Projects
? One categorization is whether the
project addresses
? a problem
? an opportunity
? a directive
? Another categorization is how long it
will take to do and when it is needed
? Another is the overall priority of the
project
2013-3-1 18
3,Financial Analysis of Projects
? Financial considerations are often an
important consideration in selecting
projects
? Three primary methods for determining
the projected financial value of projects,
? Net present value (NPV) analysis
? Return on investment (ROI)
? Payback analysis
2013-3-1 19
Explain Financial Terms in Your Own
Words
? NPV(Net Present Value)
? ROI(return on investment )
? Payback analysis
2013-3-1 20
Net Present Value Analysis
? Net present value (NPV) analysis is a method
of calculating the expected net monetary gain
or loss from a project by discounting all
expected future cash inflows and outflows to
the present point in time
? NPV is one dollar amount
? Projects with a positive NPV should be
considered if financial value is a key criterion
? The higher the NPV,the better
2013-3-1 21
Net Present Value Example
2013-3-1 22
Return on Investment
? Return on investment (ROI) is income divided
by investment
ROI = (total discounted benefits - total discounted costs)
/ discounted costs
? ROI is a percentage,like 10%,20%,etc,
? The higher the ROI,the better
? Many organizations have a required rate of
return or minimum acceptable rate of return
on investment for projects
2013-3-1 23
Payback Analysis
? The payback period is the amount of
time it will take to recoup,in the form
of net cash inflows,the net dollars
invested in a project
? Payback occurs when the cumulative
discounted benefits are greater than
the cumulative discounted costs
? Many organizations want IT projects to
have a fairly short payback period
2013-3-1 24
NPV,ROI,and Payback Analysis for
Project 1
2013-3-1 25
NPV,ROI,and Payback Analysis for
Project 2
2013-3-1 26
Class Exercise – Pair up
? Use Excel if available
? If you don’t have a computer handy,lay out
the spreadsheet on paper and use a
calculator or estimate the numbers
? Note that this exercise uses the same
discount rate,so you can use the discount
factors,It’s better to enter the discount
formula if using a spreadsheet and discount
rates will change
2013-3-1 27
4.Weighted Scoring Model
? A weighted scoring model is a tool that
provides a systematic process for selecting
projects based on many criteria
? First identify criteria important to the project
selection process
? Then assign weights (percentages) to each criterion
so they add up to 100%
? Then assign scores to each criterion for each
project
? Multiply the scores by the weights and get the total
weighted scores
? The higher the weighted score,the better
2013-3-1 28
Sample Weighted Scoring Model for
Project Selection
2013-3-1 29
Class Activity – Large Group
? Create a weighted scoring model for
selecting a mate
? Determine 4-5 important criteria,then
determine their weights
? Pick a few candidate mates and apply
scoring model
? Calculate weighted scores (I’ll put in
Excel)
2013-3-1 30
4.2.3 Project Charters
? After deciding what project to work on,
it is important to formalize projects
? A project charter is a document that
formally recognizes the existence of a
project and provides direction on the
project’s objectives and management
? Key project stakeholders should sign a
project charter to acknowledge
agreement on the need and intent of the
project
2013-3-1 31
Sample Project Charter
P roje ct T itle, Inf orm ation T ec hn olo gy ( IT ) Upg ra de P rojec t
P roje ct S tart D ate,M ar ch 4,20 02 P roje ct ed F inish Date, De ce m ber 4,20 2
P roje ct Manag er, Kim N gu y en,69 1 - 27 84,kn gu y en@ abc,com
P roje ct O bj ec tives,Upg ra d e hardwar e and sof twa re fo r all em plo y ee s
(a pp roxim ate ly 2,00 0) within 9 m on ths based on new corporate sta nd ar ds, Se e
atta ched sheet describing the new stand ar ds, U pg ra des m ay a f f ec t se rver s a nd
m idrange c om pu ter s a s w ell as network har dwar e and sof twa re, Bud geted $1,000,000
f or hardwar e and sof twa re c os ts a nd $50 0,00 0 f or labo r costs,
Ap pr oa ch,
? ? Upd ate the IT invento ry data base to dete rm ine upg ra de needs
? ? De velo p detailed cost estim ate fo r project and r epo rt to CI O
? ? Issue a r equ est f or qu otes to ob tain har d wa re a nd sof twa re
? ? Use internal staf f a s m uch a s po ssib le to do the plan nin g,analy sis,and installation
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Sample Project Charter (continued)
N am e R ole R e sponsibil ity
Wa lt e r Sc hm idt,CE O Pr oje c t Spon so r M on it or p r oje c t
M ike Z w a c k CI O M on it or p r oje c t,pr ov ide
sta f f
K im N g uy e n Pr oje c t Ma na g e r Plan a nd e x e c ute p r oje c t
J e f f J oh ns on D ire c tor o f I T O pe r a ti on s M e ntor K im
N a nc y Re y no lds V P,H um a n R e so ur c e s Pr ov ide sta f f,issu e m e mo
to a ll e mp loy e e s a bo ut
pr oje c t
Stev e M c Ca nn D ire c tor o f Pur c ha sing A ssist in pu r c ha sing
ha r dw a r e a nd so f tw a r e
Sign - of f, ( Sig na tur e s o f a ll a bo ve sta ke ho lde r s)
Roles and Responsibilities,
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4.3 Scope Planning and
the Scope Statement
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Scope Planning
? After a project charter is done,many
projects require additional
documentation to determine the
scope—scope planning,
? Main output of scope planning is Scope
Statement
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Scope Statement
? A scope statement is a document used
to develop and confirm a common
understanding of the project scope,It
should include
? a project justification
? a brief description of the project’s products
? a summary of all project deliverables
? a statement of what determines project
success
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4.4 Scope Definition and the
Work Breakdown Structure
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Scope definition
? After completing scope planning,the next
step is to further define the work by
breaking it into manageable pieces
? Good scope definition
? helps improve the accuracy of time,cost,and
resource estimates
? defines a baseline for performance
measurement and project control
? aids in communicating clear work
responsibilities
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4.4.1 The WBS
? A work breakdown structure (WBS) is an
outcome-oriented analysis of the work
involved in a project that defines the total
scope of the project
? It is a foundation document in project
management because it provides the basis
for planning and managing project schedules,
costs,and changes
? You need a WBS to create a Gantt chart,do
critical path analysis,and to use earned value
analysis
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Sample Intranet WBS Organized
by Product
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Sample Intranet WBS Organized by
Phase
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Intranet WBS in Tabular Form
1.0 Concept
1.1 Evaluate current systems
1.2 Define Requirements
1.2.1 Define user requirements
1.2.2 Define content requirements
1.2.3 Define system requirements
1.2.4 Define server owner requirements
1.3 Define specific functionality
1.4 Define risks and risk management approach
1.5 Develop project plan
1.6 Brief web development team
2.0 Web Site Design
3.0 Web Site Development
4.0 Roll Out
5.0 Support
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Intranet WBS and Gantt Chart in
Microsoft Project
WBS Gantt Chart
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Intranet WBS and Gantt Chart
Organized by PM Process Groups
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4.4.2 Approaches to Developing
WBSs
? Using guidelines,Some organizations,like
the DOD,provide guidelines for preparing
WBSs
? The analogy approach,It often helps to
review WBSs of similar projects
? The top-down approach,Start with the
largest items of the project and keep
breaking them down
? The bottoms-up approach,Start with the
detailed tasks and roll them up
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Basic Principles for Creating WBSs*
1,A unit of work should appear at only one place in the WBS,
2,The work content of a WBS item is the sum of the WBS items
below it,
3,A WBS item is the responsibility of only one individual,even
though many people may be working on it,
4,The WBS must be consistent with the way in which work is
actually going to be performed; it should serve the project
team first and other purposes only if practical,
5,Project team members should be involved in developing the
WBS to ensure consistency and buy-in,
6,Each WBS item must be documented to ensure accurate
understanding of the scope of work included and not
included in that item,
7,The WBS must be a flexible tool to accommodate inevitable
changes while properly maintaining control of the work
content in the project according to the scope statement,
*Cleland,David I,Project Management,Strategic Design and Implementation,1994
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Class Exercise
? Create a WBS for building a dream
house(or Event Planning WBS )
? Get into groups of 6-7 and have one
person describe his/her dream home
? Group decide how to organize the work
involved in making the home a reality
? List several deliverables for each level
1 WBS item
? Take one WBS item down to level 3
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More WBS Suggestions
? Many projects can use the approach
shown by process group
? The executing section is where projects
vary the most
? To make the WBS easier to map to a
schedule,you can focus on deliverables
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Sample Deliverables and Dates
? Initiating,Project charter,2/1
? Planning,Project plan,4/1
? Executing,
? Concept deliverable 1,5/1
? Design del,1,5/1,del,2,6/1
? Development del,1,7/1,del,2,9/1
? Roll Out del,1,10/1
? Support del,1,11/1
? Controlling,Monthly project reviews
? Closing,Project archives,12/1
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4.5 Scope Verification and
Scope Change Control
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Scope Verification and Scope Change
Control
? It is very difficult to create a good
scope statement and WBS for a project
? It is even more difficult to verify project
scope and minimize scope changes
? Many IT projects suffer from scope
creep and poor scope verification
? FoxMeyer Drug filed for bankruptcy after
scope creep on a robotic warehouse
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Factors Causing IT Project Problems*
F a c tor Ra n k
L a c k o f u se r in p u t 1
I n c o mp le te r e q u ir e me n ts a n d sp e c if ic a tion s 2
Ch a n g ing r e q u ir e me n ts a n d sp e c if ic a tion s 3
L a c k o f e x e c u tive su p p o r t 4
T e c h n o log y in c o mp e te n c e 5
L a c k o f r e so u r c e s 6
U n r e a listic e x p e c ta tion s 7
U n c le a r o b je c tive s 8
U n r e a listic time f r a me s 9
N e w T e c h n o log y 10
*Johnson,Jim,"CHAOS,The Dollar Drain of IT Project Failures," Application Development Trends,
January 1995,www.stadishgroup.com/chaos.html
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4.5.1 Suggestions for Improving
User Input
? Insist that all projects have a sponsor
from the user organization
? Have users on the project team
? Have regular meetings
? Deliver something to project users and
sponsor on a regular basis
? Co-locate users with the developers
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4.5.2 Suggestions for Reducing Incomplete
and Changing Requirements
? Develop and follow a requirements management
process
? Employ techniques such as prototyping,use case
modeling,and Joint Application Design to thoroughly
understand user requirements
? Put all requirements in writing and current
? Create a requirements management database
? Provide adequate testing
? Use a process for reviewing requested changes from
a systems perspective
? Emphasize completion dates
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Quick Quiz
? What is the main reason why firms invest in information technology
projects?
? If you have three independent projects with NPVs of $100,$400,and -
$100,which project(s) would you recommend based solely on the NPV?
? What document formally recognizes the existence of a project?
? What is the main output of the scope definition process and is also an
outcome-oriented analysis of the work involved in a project that defines
the total scope of the project?
ANSWER,to support explicit business objectives
ANSWER,Recommend the project with an NPV of $100 and the one
with an NPV of $400,Both are profitable,If you must choose one
project,recommend the project with the highest NPV? $400 in this
example,
ANSWER,a project charter ANSWER,a WBS
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Assignment for chapter 4
? For Web site project(or you are
familiar with)
? Do the identification and selection of the
Project
? Create the project charter
? Do the stakeholder analysis
? Create a WBS,Take the WBS item down
to level 3-6
